Accra Monday, February 26, 2018. The Minister for Finance, Ken Ofori-Atta has highlighted the performance of the economy and the commitments made by the government to stimulate economic activity.
Addressing a cross-section of Financial Journalists, the Minister disclosed that the government had, as of the end of January this year, released more than GH¢1.1 billion to support its flagship programmes.
Hon. Ken-Ofori Atta, giving the breakdown, indicated that out of the total amount disbursed, GH¢91.5 million has been released to support the construction of factories under a plan dubbed: “Industrializing Ghana from the ground up”, as part of the One-district, One-factory (1D1F) initiative; GH¢2.5 million for the free Senior High School (SHS) programme and GH¢105 million to support the Planting for Food and Jobs programme, adding that under the National Identification (ID) programme, an amount of GH¢126 million had also been released.
He said GH¢400 million had also been released under the Infrastructure for Poverty Eradication Programme (IPEP); GH¢100 million for the Ghana National School Feeding Programme and another GH¢100 million for the Scholarship Secretariat.
On arrears clearance, the Minister said that, as at the end of 2017, Government had managed to clear about GH¢3 billion in arrears, as against the budgeted GH¢3.7 billion adding that by end February this year, an additional amount of GH¢600 million of the arrears would have been cleared.
Explaining further, the Minister indicated that the Ministry of Finance, (MoF) had taken a serious view of the report of the Auditor-General that raised red flags over some of the claims made by contractors. “We are being extremely cautious about what we pay to save the state money which could have ended up in the wrong hands,” he said.
The Auditor-General report in January cancelled more than GH¢5 billion in claims from contractors, a phenomenon which had raised eyebrows and compelled government to ensure that payments were properly verified to prevent either non-existent payments or over-payment to contractors.
The Minister, however, gave the assurance that claims of those contractors would be sorted out as the months rolled by, adding “Our strategy, going forward, is to clear the validated stock of arrears in accordance with our 2018 budget programme”.
On macroeconomic updates, the Minister stated that government had managed to reduce the rate of price increases (inflation) from 15.4% in 2016 to 11.8% at the end of 2017 and further to 10.3% as of the end of January this year. “This puts the projection to have single-digit inflation by the end of the year on course,” he said.
The Minister attributed this success to Government’s fiscal consolidation and tightening of monetary policy, noting that the projection of 8.9% end-year inflation was feasible.
On interest rates, he said there were signs of it dropping drastically to about 20%. “Government is also shifting focus to reduce the annual budget gap and rely more on domestic revenue mobilization as part of efforts to actualize the President’s dream of having a ‘Ghana Beyond Aid’,” he said.
On debt accumulation, the Minister said the government had worked hard to ensure that debt accumulation had seen a significant decline from 47.7% in 2013 to 13.5% as of November 2017, “due to the prudent management of the economy”.
He said the Government had also changed the debt mix from short term to medium and long term, adding that, “the cost of debt had reduced to create fiscal space”.
He also noted that the market risk, roll-over risk, among other things, were also improving “our ability to meet our debt service obligations”.
On reforms, the Finance Minister indicated that the level of success achieved so far, was hinged on a number of factors, including shifting the focus of economic management from taxation to production, streamlining exemptions and automating the ports.
Others were enhanced tax audits, improvement in tax compliance and promulgation of the Earmarked Funds Capping and Realignment Act to cap transfers of earmarked funds to 25% of tax revenues to free fiscal space for development and reduce rigidities in the budget.
He outlined other reforms as the implementation of the Single Treasury Account (TSA), which had improved cash flow, enforcement of the Public Procurement Act, which significantly reduced sole sourcing resulting in substantial savings, execution of the zero central bank financing through a memorandum of understanding with the Bank of Ghana and the expansion of the role of the Auditor-General to cover the Metropolitan, Municipal and Districts Assemblies (MMDAs).
Hon. Ofori-Atta assured Ghanaians that with the economic performance so far, in spite of the challenges, Government was poised to ensure that the achievements trickled down for the people to feel them even more strongly in due course.
The Hon. Minister used the opportunity to thank the Media for their vital role in sensitizing citizenry on Government policies.
Present at the Media briefing were the Deputy Minister for Finance, Hon. Charles Adu Boahen; Deputy Minister for Information, Hon. Kojo Oppong Nkrumah; Director of Budget, MoF, Ms. Eva Esselba Mends; Director, External Resource Mobilization (Bilateral) MoF, Mr. Michael Ayesu; Director for Debt Management, MoF, Mr. Samuel Arkhurst; and Director for Monitoring and Evaluation, MoF, Mrs. Stella Williams. END.